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Small Business Rigamarole: Why Pinching Pennies, Doesn't Always Make Cents

When it comes to reinvesting in your company, CapRock Services specializes in providing capital to unique business ideas that have a strong chance for success. With a simple application and a bit of background information about your business and your goals, we can determine how to best assist you with achieving the growth you wish to see. 

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Spend Money to Make Money

For years, the idea that you must spend money to make money has been the mantra of entrepreneurs. It has also been one of the biggest reasons that some people fail to act on their business aspirations, because they believe that they do not currently have the money it takes to get started.

The reality is that you can usually get your business off the ground with minimal capital investment on your part by finding a great partner who can provide you with funding, but who can also guide you to success based on their experience within your industry or with startups in general. CapRock Services is just one example of funding that is available to business owners who want to make that first big step. 

How Much to Invest

The amount that you are able to invest in your business will ultimately depend on how much funding you can secure. CapRock Services uses EBITA among other numbers to determine the viability of your business model before making a qualifying decision.

EBITA stands for Earnings Before Interest, Taxes and Amortization. Your monthly income statements will indicate your earnings before taxes. From there you can add in taxes and amortization to reach a final number.

This is basically your business's cash flow under normal operating conditions. If you have strong cash flow, your business shows good promise for long-term profitability with regular reinvestments. This is a good sign for investors and lenders who want to offer you money to make those expansions. 

Why Reinvest?

Reinvesting in your business allows you to grow in a number of ways. It is not limited to just purchasing a bigger building. Reinvestment can simply mean hiring the correct bookkeepers to handle your finances. Reinvestment can mean paying off old debt from your initial launch. Reinvestment can mean putting a ton of energy into marketing and reaching new customers.

Regardless of what form it takes, reinvestment is the only way for you to grow month after month. Failure to reinvest in your business will ultimately lead to stagnation and inability to grow altogether, which is why it doesn't make sense to store all of your money up in savings or to pocket all of your profits for personal spending.

If you plan ahead and make regular investments in your company, and you learn which investments earn the highest returns, you can easily start seeing results in just a few months.

CapRock Services

At each major milestone your business reaches, the base operating costs will increase incrementally. To stay above water, it is imperative that you are investing in people, technology and infrastructure that will support the weight of those operating expenses over time. By building stability into your business model you will have more freedom to reach customers, make more sales, and drive profits.

For more information, please contact CapRock Services.  We are proud to provide business solutions to thousands of customers across the United States.